During these challenging and unprecedented times, dairy farmers across the nation are finding themselves in financial peril. Many are faced with the agonizing decision of ending their family legacy and giving up farms that have been passed down from generation to generation.
To make matters more challenging, the SBA announced the funds for PPP and EIDL have dried up due to the incredibly high demand for these assistance loans. While many have had the opportunity to receive financial assistance, which will provide some relief to their business operations, many small businesses are essentially left high and dry.
The impact of COVID-19 has left the dairy industry in an impossible and unforeseen situation. There has been 28% decline in fluid milk demand, which was once used to produce cheese, and a 34% decline in demand for nonfat dry milk, which had been used by restaurants and schools. As these businesses and institutions remain closed, so do their market for dairy products.
Farmers have been asked by their milk cooperatives and processors to dispose of milk because there simply is nowhere for it to go. The fruits of their hard work have, practically overnight, become worthless. With milk prices steeply dropping, the farmers who are not forced to dispose of their milk, are paid $5.00-$6.00 less for every hundred pounds of milk they ship — this doesn’t even come close to covering the costs to produce the milk. The USDA recently announced a financial assistance program for farmers, but the amount of resources in the program won’t come close to break even.
The funds provided by PPP and EIDL have been used to help farmers pay their mortgages, utilities and meet their payroll needs to keep their workforce employed. During a time of skyrocketing unemployment, the importance of this cannot be understated. In the state of Wisconsin alone, PPP funds were used to pay the wages of 90,000 workers.
The American Dairy Coalition is asking Congress to swiftly replenish funds to SBA relief programs to allow the Paycheck Protection Program and the Emergency Injury Disaster Loan program to continue providing assistance to our nation’s small businesses and their employees while they try to survive this catastrophe. If Congress does not act quickly, many vital small businesses may have to close their doors — and a multitude of additional employees will be added to the growing number of unemployed Americans.
About The American Dairy Coalition:
The American Dairy Coalition (ADC) is a farmer-led national lobbying organization of progressive, modern dairy farmers. We focus on federal dairy policy.